Koramblyum v Medvedovsky

[*1] Koramblyum v Medvedovsky 2005 NY Slip Op 50520(U) Decided on February 10, 2005 Supreme Court, Kings County Schmidt, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on February 10, 2005
Supreme Court, Kings County

Victoria Koramblyum, as Mother and Natural Guardian of Sabrina Koramblyn and Victoria Koramblyum, individually, Plaintiffs,

against

Mark Medvedovsky, Fanya Medvedovsky, and Alex Meved, Defendants.



7357/02

David I. Schmidt, J.

defendants Mark Medvedovsky and Faya Medvedovsky move and defendant Alex Meved cross-moves, pursuant to CPLR 2304, for an order quashing a deposition subpoena served upon Nick Calise, a non-party, and for a protective order pursuant to CPLR 3103(a), (1) prohibiting the plaintiffs from deposing Nick Calise, or anyone else from Nixx Investigations (Nixx) or from calling either Nick Calise or anyone else from Nixx as a trial witness, and (2) barring plaintiffs from using at trial, for any purpose, any materials prepared by Nixx, on the ground that any such materials, and any deposition or trial testimony referring to or based upon same, are privileged pursuant to CPLR 3101(d), which protects from disclosure any materials prepared "in anticipation of litigation." Plaintiffs Victoria Koramblyum, as mother and natural guardian of Sabrina [*2]Koramblyum, and Victoria Koramblyum, individually, oppose the instant motion on the grounds that (1) the subject materials were not prepared solely for the purpose of the instant litigation, and (2) even if the claimed privilege applies to said material, such privilege was, in any event, waived upon the prior disclosure of the material to all parties in a related rescission action, without any reservation by defendants of the privilege they now assert.

In the instant action, plaintiffs seek damages for injuries allegedly sustained by Sabrina Koramblyum on February 18, 2001, when she was bitten by a dog while visiting the defendants at their residence. On March 9, 2001, Mr. Medvedovsky notified Quincy Mutual Fire Insurance Company (Quincy Mutual), the insurance carrier, of the dog bite incident. Pursuant to said notification, Mr. Medvedovsky informed Quincy Mutual that "the parents of the girl do not claim that they wish to sue us but we wanted to report the incident if they feel otherwise." In February 2002, plaintiffs commenced the instant personal injury action against defendants.

In June 2002, an issue arose concerning the presence of the alleged offending dog at the Medvedovsky residence. Due to this issue, which impacted on coverage of the incident by the carrier, Quincy Mutual commenced an action against the Medvedovskys for rescission of the insurance contract.

During the rescission action, discovery was exchanged by the parties. On August 12, 2003, the Medvedovskys requested the production of the complete Quincy Mutual claims file pertaining to the subject dog bite incident. No objections were made by any party regarding the production of the file and Quincy Mutual was directed, pursuant to a compliance conference order issued on August 12, 2003, to produce the file to all parties. Accordingly, both the Medvedovskys, as well as the plaintiffs in the instant matter, received copies of the contents of the claims file during the pendency of the rescission action.

On March 9, 2001, Quincy Mutual had retained Nixx to investigate the dog bite incident. In the course of said investigation, a representative of Nixx obtained a written statement from Mr. Medvedovsky, dated March 14, 2001, in which he claimed that "[w]e have lived here as long as [our son] has owned the [subject] dog." Said statement was included in the claims file. Also included in the claims file was a report concerning the incident (Incident Report), dated March 22, 2001, which was prepared by Mr. Calise as the result of the investigation, as well as interviews conducted by another Nixx investigator with regard to the incident. The report, contrary to the Medvedovskys' written statements and deposition testimony, wherein they claimed that there had been no prior incidents involving the dog, stated that "[o]ff the record the Insured [Mr. Medvedovsky] advised us that Max [the subject dog] is very protective. He recalled one occasion when he was out walking the Dog on a leash when someone came up to him and patted him on the shoulder in greeting. The dog lunged after that individual but the Insured was fortunate enough to pull back on the leash and the individual was not bitten."

With regard to the relevance of the contents of the claims file to the rescission action, said action was apparently based upon the discrepancy between Mr. Medvedovsky's written [*3]statement, which appeared to indicate that the dog had been present at the subject residence at the time Mr. Medvedovsky applied for homeowner's insurance, and the application for the insurance itself, which failed to state that a dog resided in the Medvedovsky household. In the instant action, plaintiffs' claim that the file is relevant to their personal injury claims in that the Incident Report contains an admission by the Medvedovskys that the dog had exhibited violent propensities in the past.

Pursuant to CPLR 3101 (d) (2), "materials otherwise discoverable . .. and prepared in anticipation of litigation or for trial by or for another party, or by or for that other party's representative . . . may be obtained only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the case and is unable without undue hardship to obtain the substantial equivalent of the materials by other means." It is well settled that a "liability insurer's claim file . . . is conditionally immune from discovery as material prepared for litigation" (Sofio v Hughes, 148 AD2d 439 [1989]); Hannold v First Baptist Church, 254 AD2d 746 [1998][statements made by several witnesses to defendant's liability carrier conditionally privileged even though made prior to commencement of litigation]); see also Rojas v New York City Transit Authority, 276 AD2d 684 [2000] [written statements of eyewitnesses to incident which are given to claims examiner are "truly material prepared for litigation"]; Recant v Harwood, 222 AD2d 372 [1995]["the applicable rule is that an accident report, made by a defendant to his liability insurance carrier or to his attorney with respect to a plaintiff's claim, is conditionally privileged . . . ."]); Grotallio v Soft Drink Leasing Corp., 97 AD2d 383 [1983] ["The contents of an insurer's claim file which have been prepared for litigation against its insured are immune from disclosure"]). Generally, "[o]nce an accident has arisen, there is little or nothing that the insurer or its employees do with respect to an accident report except in contemplation and in preparation for eventual litigation or for a settlement which may avoid the necessity of litigation" (Kandel v Tocher, 22 AD2d 513, 514 [1965]).

The "anticipation of litigation" privilege, however, does not extend to documents which are "multi-motivated" (Friend v SDTC-The Center for Discovery, 2004 NY Slip Op. 09339 [2004]). Accordingly, "statements . . . given to a liability insurer's claims department as part of an internal investigation or for internal business purposes are not immune from discovery as material prepared solely in anticipation of litigation" (Agovino v Taco Bell 5083, 225 AD2d 569 [1996]). With regard to demonstrating the privileged nature of the subject documents, "[t]o fall within the conditional language of CPLR 3101(d)(2), the material sought must be prepared solely in anticipation of litigation" (Zampatori v United Parcel Service, 94 AD2d 974 [1983]). In addition,"the party resisting disclosure has the burden of showing that the materials sought were prepared solely for litigation" (Martino v Kalbacher, 225 AD2d 862, 863 [1996]), and "this burden cannot be satisfied with wholly conclusory allegations" (Claverack Coop Ins. Co. v Nielson, 296 AD2d 789 [2002]; accord Mavrikis v Brooklyn Union Gas Co., 196 AD2d 689 [1993]). [*4]

Once the privilege has been established, it can nonetheless be waived if the putative privileged documents are disclosed. "In general, disclosure of a privileged document results in the waiver of the privilege unless the party asserting the privilege meets its burden in proving that (1) it intended to maintain confidentiality and took reasonable steps to prevent its disclosure, (2) it promptly sought to remedy the situation after learning of the disclosure, and (3) the party in possession of the materials will not suffer undue prejudice if a protective order is granted" (AFA Protective Systems, Inc. v City of New York, __AD3d __, 2004 NY Slip Op. 09584 [2004]); accord John Blair Communications, Inc. v Reliance Capital Group, L.P., 182 AD2d 578, 579 [1992]). Accordingly, where a party fails to exercise due diligence and reasonable care in maintaining the confidentiality of the privileged documents, a court may deem the claimed privilege waived (see Clark -Fitzpatrick, Inc. v Long Island Railroad Co., 162 AD2d 577 [1990] ["(defendant) failed to exercise due diligence and reasonable care to protect the confidentiality of these documents (protected by the attorney-client and work product privileges) by allowing one of them to be utilized during a deposition and the other document to be expressly referred to and quoted from in various litigation papers and briefs . . . ."]; see also Buxton v Ruden, 12 AD3d 475 [2004] ["by voluntarily turning over . . . (his) former attorney's case file (to his adversary) without any reservation of privilege, the plaintiff . . . unqualifiedly waived any claim of privilege regarding the contents of the case file"]; Bras v Atlas Construction Corp., 153 AD2d 914 [1989] ["To the extent (the documents in question) might be viewed as material prepared for litigation, we conclude that any qualified privilege applicable to such material has been waived in this case by virtue of the (defendant's) failure to exercise due diligence. The record demonstrates that the documents were served by the (defendant) upon other parties as business records without any reservation of privilege"]).

In the instant case, defendants have demonstrated that the claims file in question is protected by the "anticipation of litigation " privilege as codified at CPLR 3101 (d) (2). In support of this contention, defendants submit an affidavit from Philip Carter, the Casualty Claims Manager at Quincy Mutual. Mr. Carter states that "[h]aving 25 years of experience in handling claims, I immediately anticipated that litigation would develop from this incident." He claims that he retained Nixx to investigate the dog bite incident on the same day that he was notified by the Medvedovskys of the incident because he "needed to ascertain the facts while the incident was still fresh in the memory of the witnesses" in order to prepare a defense if litigation was to ensue. Although plaintiffs argue that the investigation by Nixx was performed for Quincy Mutual for its own unspecified, internal business purposes, and cite to Mr. Medvedovsky's statement to the effect that litigation was not threatened by plaintiffs at the time of the investigation, the Incident Report concerns itself mainly with ascertaining the pertinent facts with regard to the subject dog, the incident itself and witness statements pertaining thereto. Moreover, Mr. Medvedovsky's notification to the insurance company made clear that although plaintiffs claimed that they did not wish to sue, he was [*5]reporting the incident to the carrier in the event that plaintiffs ended up "feel[ing] otherwise."

In addition, even though a written statement made by Mr. Medvedovsky regarding whether the dog was living at the defendants' residence at the time he applied initially for the subject insurance is alleged by defendants to have formed the basis for the rescission suit, there is no indication that the investigation by Nixx, at the time it was conducted, was made for any internal business purposes of Quincy Mutual other than the marshalling of relevant facts in the event that litigation arose from the incident. Although facts which were revealed during such an investigation may have led the insurance carrier at a later date to seek to rescind the relevant insurance contract, there is no evidence that the purpose of the investigation by Nixx was to ascertain whether the Medvedovskys had provided proper disclosure to the carrier when they initially applied for insurance. Plaintiffs have not demonstrated, therefore, that the presumptive conditional privilege generally afforded to insurance claim files should not be applied with equal force to the claims file at issue in this case. Accordingly, the defendants have demonstrated that the claims file, including the Incident Report, are privileged.

The defendants have not established, however, that they exercised the requisite due diligence in preventing the disclosure of such confidential and privileged materials and, accordingly, the court deems them to have waived said privilege. It is undisputed that, in the rescission action, the Medvedovskys requested the disclosure of the claims file. Such disclosure, however, was not conditioned upon any confidentiality order nor were any court-ordered, or stipulated to, limitations imposed upon the disclosure or use of such information. Rather, the claims file was disclosed by Quincy Mutual to all parties to the rescission action, including the plaintiffs in the instant action, without any reservation of privilege by Quincy Mutual or defendants with regard to the case at bar, which was already pending prior to the rescission action and the exchange of any discovery therein. Although the claims file was requested by defendants in 2002, and subsequently, as previously discussed, disclosed to plaintiffs herein with the full knowledge of defendants, defendants did not move for a protective order with regard to the allegedly privileged materials until February 2004. Accordingly, although "there is [no] clear and unequivocal proof of an intentional and voluntary waiver of privilege" in this case, the defendants' failure to exercise due diligence in preserving the asserted privilege constrains this court to deny their motion for an order quashing the deposition subpoena served on Mr. Calise's and for a protective order in regard to the claims file and Incident Report (see Bras, 153 AD2d at 914).

As a result, defendants' motion and cross motion to quash the subpoena seeking the deposition of Nick Calise, and for a protective order prohibiting the disclosure of the subject claims file and Incident Report, are denied in their entireties.

The foregoing constitutes the decision and order of the court.

E N T E R, [*6]

J. S. C.